Mr. Baszler: Heartland began in the mutual fund business back in the early 1980s with our Heartland Value Fund, which is a small cap value product. It's been one of the longest running small cap funds and one of the more successful ones. Lipper currently has it ranked number one for the 20-year period ending June 30, 2007. The firm has since added two additional value-based funds. The product that I work on, The Heartland Select Value Fund, is a multi-cap fund and uses the exact same disciplined process that is used to manage our top- ranked small cap value fund. We look for high quality companies that are trading at discounted valuations based on traditional value metrics such as low p/e, low price to book, low price to cash flow, and then we also consider some qualitative items such as the company's business strategy and strength of its management team. We also spend a lot of time on the balance sheet and understanding a company's capital structure and future cash needs. Our firm is exclusively focused on value investing and is very committed to our disciplined investment process.
TWST: What is the environment like at this time for your type of value
investing?
Mr. Baszler: I believe the current environment is very favorable for funds such
as the Heartland Select Value, because we do focus on balance sheet strength as
well as low price to book values. By focusing on companies that are trading near
their intrinsic value or what they might be worth on a private takeout, we
believe our funds offer greater downside protection during market declines or
periods of tightening credit and liquidity. In the current market environment -
when you have a lot of concerns about credit quality and liquidity - companies
with manageable balance sheets (less leverage) tend to hold up better.
Historically our funds have shown good relative performance in down markets and
choppy markets like we have today.
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